Justice Rakesh Kumar Jain: (Oral)
Comp. App. (AT) (Ins) No. 1681 of 2023
1. This appeal is directed against the order dated 20.10.2023 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court No. IV) by which an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (In short ‘Code’) by LIC Housing Finance Ltd. (Financial Creditor) against Shree Sainath Land and Development India Ltd. (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (in short ‘CIRP’) has been admitted. Moratorium was imposed and Manish Motilal Jaju was appointed as the Interim Resolution Professional (in short ‘IRP’).
2. Aggrieved against the said order, the present appeal has been filed.
3. During the pendency of this appeal, the Appellant tried to convince the Court that it is in the process of making an arrangement of some of debt. In this regard an order was passed on 02.04.2024 which is reproduced as under: -
“Learned Counsel for the Appellant submits that now the Appellant has a global finance institution who has agreed to finance the entire debt and the Appellant is now submitting a proposal today during course of the day to the Financial Creditor to consider the same. It is submitted that in the event the matter is listed after two weeks to enable the Respondent to consider the proposal and there is no settlement, the Appeal may be heard on the next date. List on 22nd April, 2024.”
4. Thereafter, on the next date of hearing i.e on 22.04.2024 the following order was passed:-
“Counsel for the Appellant seeks adjournment which is opposed by Counsel appearing on behalf of the Respondent. As a last opportunity, list this Appeal on 26th April, 2024. It is made clear that no further adjournment shall be granted on the next date.”
5. Today also, Counsel for the Appellant earnestly requested for an adjournment on the ground that they are in the process of making arrangements for the funds and he did not deny during the course of hearing that there is a debt of Rs. 111,68,55,172.35/- as claimed by the Financial Creditor and a default on their part in not making the payment on account of which the application has been admitted.
6. Since, the order dated 22.04.2024 was peremptory in nature because it was made clear that no further adjournment shall be granted on the next date of hearing, therefore, we have asked counsel for the parties to argue the matter.
7. Counsel for the Appellant has submitted that during the pendency of the main petition before the Adjudicating Authority, an order was passed on 07.08.2023. The said order is reproduced as under:-
“1. Mr. Akhil Sarathy, Ld. Counsel for the Petitioner present. Mr. AkshayPetkar, Ld. Counsel for the Respondent present.
2. Ld. Counsel for the Respondent submits that the default is arising because of non-execution of sale deed by one of the Board Member, who is the cosignatory for exercising the power on behalf of the company in terms of arrangement. In the absence of the signatures, the sale deeds could not be executed by the other co-signatory directors. Accordingly, the other cosignatory directors of the Respondent have filed a petition u/s 241-242 bearing CP.191/2023 seeking appointment of administrator or authority in his favour for execution of sale deed so as to avoid the default and pay the financial creditor out of those proceeds. The Ld. Counsel submitted that the prayer in the CP. 191/2023 is allowed, the debt in default claimed by the Applicant can be substantially paid and the default can be cured. In view ofthis, the Ld. Counsel requested this bench to post this matter after two weeks.
3. List this matter for hearing on 21.08.2023.”
8. It is submitted that there was a dispute between the two directors of the Company (CD), as a result of which, the sale deed of the property could not be executed and in this regard a petition under Section 241 and 242 of the Companies Act, 2013 (in short ‘Act’) has been filed which should have been taken into consideration by the Adjudicating Authority alongwith the application decided under Section 7 of the code.
9. On the other hand, Counsel for Respondent (Financial Creditor) has submitted that except for sending the terms sheet no proposal much less concrete has been given by the Appellant so far even till the last night, therefore, it is only a play to seek adjournment though this appeal is pending since December, 2023. It is further submitted that in case the petition proceeds and the Appellant makes the arrangement for discharging its liability, it can file an application under Section 12A of the Code for withdrawal of the petition.
10. We have heard Counsel for the parties and after examining the record, are of the considered opinion, that for the purpose of deciding the application under Section 7 of the Code, the Court has to see as to whether there is a debt and default on the part of the CD as it has been laid down by the Hon’ble Supreme Court in the case of M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr., Civil Appeal No. 8337 – 8338 of 2017.
11. Since, Counsel for the Appellant has categorically, before us, during the course of hearing, admitted that there is a debt and default on their part, therefore, there is hardly any reason to interfere in the present appeal for the purpose of setting aside the well-considered order.
12. Thus, the appeal is hereby dismissed though without any order as to costs.
